US Wine Regions: Marketing and Value – Which Is Best?

In a recent article, I found that marketing French wines by region has been extremely effective: Bordeaux and Burgundies (French wines named and marketed by their regions) are generally priced two or three times higher than wines with the same dominant grape.

For that article, I drew on information from the Center for Wine Origins, a US organization that promotes and protects regional wine marketing. The Napa wine region is one of the Center’s members, and in 2007, Napa became the first U.S. region to win protection in the European Union (2007).

The questions addressed in this article are whether Napa benefits from marketing by region relative to its US and foreign competitors and where the consumer can find the best value.

American Regional Competitors

My analysis is based on comparisons of three US regions: Napa, Sonoma, and Columbia Valley. The Napa and Sonoma regions are in California. Most of Columbia Valley is in Washington with a small portion in Oregon. As Table 1 indicates, Sonoma is largest in terms of acres planted, but Napa has more than twice as many wineries.

Analysis

The method of analysis is similar to the one used in the earlier piece. Using wine ratings and release prices from the Wine Spectator database, I compare the prices of wines rated 90 and up. Table 2 provides a breakdown of wines rated in the three US regions. The Wine Spectator (WS) has rated more reds than whites from the three regions and about 30% of the wines from each region have been rated 90 and up.

My analyses below are based on three sets of WS wine ratings: 90-91, 92-94, and 95 up. While one can quibble about certain WS ratings, any wine rated 90 or more by WS is a very good wine.

Chardonnay

The comparative data on Chardonnays are presented in Table 3. Sonoma is the dominant Chardonnay grower in among the three US regions, and its Chardonnays command higher prices than those from Napa.

Chardonnay is the dominant grape in White Burgundies from France. Note how much more these wines sell at – marketing by region clearly works for White Burgundies! The average prices for Columbia Valley wines rated 90-91 and 92-94 are lower than the other regions. The bottom row provides the region with the lowest price for each rating. In this case all three regions had wines priced at $20 for the 92-94 rating.

Cabernet Sauvignon

When it comes to Cabs, Napa dominates, both in terms of wines rated and prices. French Red Bordeaux (the dominant grape is Cabernet Sauvignon) have been included for comparative purposes. Note that Napa’s wines in the 90-91 ratings command a higher price than even the Bordeaux.

Columbia is again the US region with the least expensive wines in each rating category. Columbia also has the lowest priced wine in each category. South Africa has been included because it has a lower average price for Cabs ranked 92-94 than the other regions.

Pinot Noir

In terms of wines produced, Sonoma dominates the ratings. There was no Columbia Valley wine that received a 90 rating.

Chile is included because its average price for wines rated 90-91 was lower than the other regions. The dominant red grape in Red Burgundies is Pinot Noir, so it is included for comparison. Once again, it appears that French regions are a great marketing vehicle.

Shiraz

All three US regions produce significant amounts of Shiraz. And Napa is able to charge more for its Shiraz than the other regions. Again, Columbia has the lowest average price for all three ratings.

Australia has been included because it is the largest Shiraz producer. And while its average prices are not special, it has the lowest priced wine in each rating category.

Zinfandel

Both Napa and Sonoma produce significant amounts of Red Zinfandel. But the ratings and prices do not suggest that Napa has a marketing advantage over Sonoma.

Conclusions

There is not much evidence to suggest that Napa is getting a marketing advantage by promoting its wines via region: Cabernet Sauvignon is the only area in which its prices are significantly higher than Sonoma’s.

The French regional wines are in a class by themselves in commanding high prices.

Looking at it from the consumer’s standpoint, Columbia Valley wines appear to offer great values at low prices.

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Interesting article.
You refer to 'Sonoma' - as a county and wine region it has 12 distinct wine regions. The acreage you list reflects the entire county and 12 AVAs, the # of wineries isn't accurate though. North Sonoma alone has well over 200.
I can't really agree with this statement: "There is not much evidence to suggest that Napa is getting a marketing advantage by promoting its wines via region: Cabernet Sauvignon is the only area in which its prices are significantly higher than Sonoma’s."
Napa IS Cabernet. The region is renowned for that and production dominates. Little Pinot Noir is grown there, unlike Sonoma County, especially the cool climate Russian River Valley and Sonoma Coast AVA's who are world renowned for their red & white burgundy (Pinot & Chardonnay.)
While this isn't France and we don't restrict what can be grown and/or blended, differentiation on a few varietals is possible and does occur, and in that case marketing an AVA for that varietal makes sense: Napa Cab, RRV Pinot Noir, Dry Creek Valley Zin, Paso Robles Rhones. Just as it makes sense why White Burgundy's command a premium. The fact that it doesn't apply to wide range of wine types, only makes sense, as does little to demonstrate that AVA marketing doesn't have value, in my opinion.

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